The annual gas bill of German households will increase by several hundred euros due to the energy crisis, according to data published on Monday, although the government nevertheless promises to cushion the scare for the most modest. From October 1, importers will be able to charge 2.4 cents more per kilowatt hour (KWh) of gas to companies and individuals, the network operator organization Trading Hub Europe (THE) announced on Monday.
In specific terms, and with VAT included, 2.4 cents per KWh means 600 euros more in the annual bill of a family with two children and an average consumption of 20,000 KWh. The amount is 480 euros without taxes. Berlin has promised to “find a way” to exempt this additional VAT levy, according to the Ministry of Economy.
The tax was established by the government until April 1, 2024 to support gas importers and distributors who have had to buy more expensively on the world market since the war in Ukraine and the drop in Russian deliveries. It must be recalculated every three months. “The goal is to secure gas supply after the German and European energy crisis caused by the Russian attack on Ukraine,” the ministry explained.
Dependence on Russian gas, a “political error”
Germany has stepped up its efforts in recent months to find alternative supplies. More than half of imported gas came, before the Ukraine war, from Russia. Since then, this proportion has increased to 35%. “Germany developed a business model that was largely based on reliance on cheap Russian gas,” Robert Habeck, Minister for the Economy and Climate, told a news conference. “It is a political error to have become dependent on a potentate (…) who disregards the rights of man and citizens,” he hammered.
To cushion the impact, the tax “must and will be accompanied by a new aid package,” Robert Habeck also promised. Germany has already launched aid worth 30,000 million euros to relieve individuals, including discounts at pumps or the popular 9-euro ticket that allows travel for a month on public transport and regional trains. However, the measure stops at the end of August.
Berlin has also planned to pump billions of euros into Uniper, Germany’s main gas importer and storage facility, hit hard by falling Russian gas deliveries since mid-June. On the contrary, the RWE group announced that it renounced its right to pass on the price increase through this surcharge.
According to the Kiel Economic Institute, the impact of the additional tax on gas bills on inflation, already high in Europe’s largest economy, is expected to rise to 0.9 percentage point by the end of the year. The association of the chemical industry (VCI), a large consumer of gas, for its part, estimates the annual extra cost caused by this tax at more than 3,000 million euros, and estimates in a press release that it is a “bitter pill “for the industrialists.
Source: BFM TV
